U.S. investment bank Morgan Stanley stressed that even as it uses AI to boost work efficiency, the role of human financial advisers remains important in wealth management. It said AI can support financial decision-making, but it is difficult to replace trust-based relationships with clients.

American Banker reported on Oct. 14 that Morgan Stanley Chief Executive Ted Pick (Ted Pick) said on a third-quarter earnings conference call that wealth management is a "people-centered business". Pick said AI can carry out a significant portion of the early work in preparing clients' investment and financial decisions. He added that what ultimately matters is how much clients trust their financial advisers.

Morgan Stanley is responding actively to the spread of AI. It is supplying funds for building AI infrastructure such as data centres, while also introducing AI into internal operations to improve productivity and operating efficiency.

In wealth management in particular, it has worked with OpenAI since 2023 to develop and use generative AI tools for financial advisers. The strategy is to use AI as a way to support work rather than as a replacement for employees.

Results were solid. Morgan Stanley's third-quarter net revenue rose 11.6 percent from a year earlier to $20.3 billion. Net income increased 6.5 percent to $4.9 billion, and earnings per share of $3.03 beat market expectations.

Wealth management net revenue hit a quarterly record of $9.1 billion. Net new asset inflows totalled $232.4 billion, up 187 percent from a year earlier. New fund inflows tied to initial public offerings contributed to growth.

Net revenue in the institutional securities division also rose 17.7 percent to about $10.0 billion. Revenue in the investment management division fell to about $1.5 billion.

Pick said he expects growth in the AI industry to offer new business opportunities for the financial sector. He said wealth management competitiveness comes not only from advanced technology but also from expertise and trust built with clients over a long period.